South East Asia

A diverse market

September 2024

South East Asia is probably the world's most diverse region for diesel generator sets.

In terms of applications, customers and competitors, the region has it all.

South East Asia is a difficult region for electric utilities. The terrain can be challenging and the region is vulnerable to extreme weather.

Recently, the region’s power grids have been placed under pressure from regular and sustained heatwaves.

In extreme heat, not only does demand for power rise, electricity grids become more inefficient and assets like power transformers are more likely to fail.

Electricity Generated by Utilities per Head of Population

(kWh, 2022)

Source: US Energy Information Administration (kWh), World Bank (Population)

Heatwaves, humidity and terrain make South East Asia a challenging region for utilities.

Diesel Generator Sets Opportunity

The South East Asia market for diesel generator sets has an overall opportunity of around $1.6 billion (2023 value based at OEM ex-works).

In 2020 and 21, Covid-19 had a severe impact on the market across the region, causing a 25% decline from 2019 levels, well beyond the average global decline of 11%.

However, since 2021, the rebound has been strong: a 25% CAGR from 2021 - 23, rising to around 50% at higher power ratings, driven by a rapidly growing data center sector across the region.

South East Asia Opportunity for Diesel Generator Sets by Power Band

US$ Millions

Source: Genstat from Parkinson Associates. Values based on OEM ex-works. Includes price inflation.

Major Markets

South East Asia has a very diverse range of markets, ranging from very low hours standby usage in countries like Singapore to high hours standby in countries like Sri Lanka, Bangladesh and Myanmar.

There is also significant prime usage in countries with many remote settlements and islands, for example Indonesia and Philippines.

Overall, the top five markets across the region (Indonesia, Japan, South Korea, Malaysia and Vietnam) account for around two thirds of the opportunity.

2023 South East Asia Diesel Generator Set Opportunity by Country

Source: Genstat from Parkinson Associates.

South East Asia is a very diverse region in terms of customers and applications for diesel generator sets.

Market Supply

Below 1,500 kVA around 40% of the South East Asia market is supplied by imports from China. While this also includes imports from Western OEMs with production facilities in China, the majority of Chinese imports to the region are from Chinese OEMs.

A further 40% is accounted for by local production in the region, usually local OEMs. Imports from the US and Europe account for around 15% of the market and most of the remaining 5% is accounted for by imports from India.

Above 1,500 kVA, the market is dominated by global, premium vertically integrated OEMs, importing from North America, Europe and China.

South East Asia Opportunity by OEM Type (2023)

All Power Bands > 7.5 kVA

Source: Genstat+ from Parkinson Associates

The Future

Over the short to mid-term, at least through the remainder of the 2020s and well into the 2030s, growth in diesel generator sets across South East Asia is likely to be strong as utility grids struggle to meet demand.

Regional heatwaves are likely to become commonplace, creating more demand for power and driving inefficiency and faults in utility transmission and distribution systems.

Demand for diesel generator sets from data centers will be strong across the region through the 2020s and beyond, with particular focus on Indonesia, Malaysia, Thailand and Vietnam.

As at a global level, diesel generator sets will remain the go-to solution for standby power, at least for the foreseeable future.

South East Asia is one of the world's fastest growing regions for the data center sector.

Microgrids will gain traction in the region but most will probably be installed by utilities as they invest in infrastructure, particularly in remote areas or islands. There’s also an emerging trend for microgrids in the tourism sector, where there is often some marketing sensitivity to carbon footprints.

Although based on renewables and energy storage, most microgrids will still include diesel generator sets for back-up.

Palawan Province, Philippines. South East Asia is spread across a multitude of islands where connection to the grid is very challenging.

Insights on Opportunity for Producers of Diesel Generator Sets

To find out more about this study, contact us at at enquiries@parkinsonassociates.com

Parkinson Associates publish an opportunity database, Genstat, available quarterly and annually, for diesel generator sets, split by 12 power bands for every country. Click here to find out more.

To find out more about our research in the diesel generator set industry, click here

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SE Asia Market Sep 24.pdf